Chapter 11 Small Business Case Under SubChapter V
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Chapter 11 Small Business Case Under Subchapter V Sub
Last Updated: November 13, 2024

11 U.S.C. 1181-1195
Fed. R. Bank. P. 1020

CHAPTER 11 SMALL BUSINESS CASES UNDER SUBCHAPTER V

  • Subchapter V is an alternative procedure that a Chapter 11 Small Business Debtor may elect to use to simplify and expedite the bankruptcy process.

Filing Requirements (Petition, Schedules, and Statements)

  • Same as Chapter 11 Small Business cases with the exception that the Chapter 11 Statement of Your Current Monthly Income (Form 122C2) is not required.

Filing Petition

Electing to Proceed as a Small Business Under Subchapter V: 

An Individual debtor will file the Petition (Form 101) and check the appropriate box in Item 13 of Form 101 to elect to be a small business under Subchapter V.

A Non-Individual debtor will file the Petition (Form 201) and check the appropriate box in Item 8 on Form 201 to elect to be a small business under Subchapter V. 

US Trustee Duties:

1. Appoint the SubChapter V Trustee

2. Schedule the 341 Meeting 

Mandatory Status Conference and Procedural Orders Issued by the Court:

  1. Chapter 11 Subchapter V Procedural Order
  2. Order Setting Deadline for Filing Proof of Claims or Interest
  3. Order Scheduling Section 1188(a) Conference and Report Deadline (Status Conference)
  4. Notice of Meeting of Creditors

CA Actions:

 

Pre-Status Conference Report

  • Due 14-Days before the Status Conference
  • Debtor is required to file a Pre-Status Conference Report stating efforts made toward filing a consensual plan.
    [Bankruptcy > Miscellaneous > Pre-Status Conference Report]

Chapter 11 Plan & Scheduling Preliminary and Final Confirmation Hearing

Filing Chapter 11 Subchapter V Plan [Bankruptcy > Plan > Chapter 11 Plan].

  • Chapter 11 Subchapter V Plan is due 90-days from the date of case filing.
  • Note: ONLY the Debtor may file a Plan during the 90-day period following case filing.

The Court will issue a Scheduling Order for the Confirmation Hearing.

 

Notice / Service Requirements:

  • 28-day Notice of the Final Confirmation Hearing is required.
  • Debtor must serve ALL creditors with the Notice of Confirmation Hearing Order, Plan, and Ballot.

Objections to Confirmation

Creditors/parties in interest may file an objection to confirmation [Bankruptcy > Plan > Objection to Confirmation of Plan/Modified Plan].


Ballots/1129 Affidavit

Ballots will be returned to the debtor's attorney. Debtor's attorney will file a Ballot Summary and 1129 Affidavit prior to the Confirmation Hearing. 

Plan Confirmation

After the Confirmation Hearing, the Court may confirm the plan as either (A) Consensual [1191(a) Consensual - No Objections to the Plan] or (B) Non-Consensual [1191(b) Non-Consensual - Plan Confirmed Over Creditor's Objection]

If the Plan is confirmed, the court will enter the Order Confirming Plan.

Consensual Plan: Plan Confirmed Without Objection, under 1191(a) (Consensual)
Plan Payments

Plan payments are made directly to the creditors
Discharge

Order Confirming Plan acts as a Discharge under 1141(d)  [Note: No separate Order of Discharge is entered]
Notice of Substantial Consumation

Notice filed by Debtor within 14-days after the Plan has been Substantially Consumated.
[Bankruptcy > Notices > Notice of Substantial Consummation]

  • Send Proof of Service to Subchapter V Trustee, U.S. Trustee, and Parties in Interest

Final Report and Account (Chapter 11)

and

Report of No Distribution

Upon filing of the Notice of Substantial Confirmation, Subchapter V Trustee will: Subchapter V Trustee Will:

  1. File Compensation and Expense Requests
  2. Distribute Funds Held According to the Plan
  3. File Appropriate Report
  1. Report of No Distrubution / No Assets (NDR)
    1. Filed if there have been No Distributions of Funds By Trustee
  2. Final Report and Account (TFR)
    1. Filed if Trustee Distributed Funds 
      (Filed after the conclusion of the Trustee's administration of the case.)
      1. Subchapter V Trustee submits the Final Report and Account to the U.S. Trustee for review
      2. U.S. Trustee files it with the Court

Trustee
Procedure

See Chapter 11 Subchapter V - Report of No Distrubution / No Assets
Discharge of Trustee Subchapter V Trustee is Discharged upon Substantial Competion of the Plan (Reasoning: Debtor will make payments directly to creditors)

 

Non-Consensual Plan: Plan Confrimed Over the Objections of Creditors, under 1191(b) (nonconsensual)
Plan Payments Debtor will make payments to the Trustee during the Payment Period (3 to 5 years) and directly to creditors after that time.
 
  • During the payment period, the Trustee is responsible for for making creditor payments.
Substantial Consumation Case Remains Open After Substantial Consumation, Until:
  1. Trustee has distrubuted ALL Play Payments
  2. Trustee has filed the Final Report and Account (TFR)
  3. No remaining matters exist for which the court must continue to exercise jurisdiction 
Discharge Debtor Receives a Discharge AFTER Completion of ALL Plan Payments (due under the Payment Period (3-5 years))
  1. Trustee files Notice of Completion of Plan Payments
    1. [Bankrputcy > Plan > Notice of Completion of Plan Payments]
  2. Clerk's Office will issue the Order of Discharge
    1. [Bankruptcy > Order/Opinions > Discharging Debtors (auto form)]
Discharge of Trustee

Subchapter V Trustee is Terminated Upon Entry of the Order of Discharge.

  • Discharge under 1191(b) applies to Individuals and Corporations

Dismissal / Conversion

If a Chapter 11 Subchapter V is Dismissed or Converted (before or after plan confirmation),

Trustee will file either the Notice of No Distrubution or Final Report and Account, depending upon whether the Trustee handled estate funds or plan payments.

  1. No Distrubutions of Estate Funds By Trustee: Trustee files Report of No Distrubution (NDR)
  2. Funds Distrubuted by Trustee: Trustee files Final Report and Account (TFR) 
    (Filed after the conclusion of the Trustee's administration of the case.)
    1. Subchapter V Trustee submits the Final Report and Account to the U.S. Trustee for review
    2. U.S. Trustee files the Final Report and Account with the Court

Closing

See Closing Bankruptcy Cases

Final Decree

After the case if fully administered, the debtor must file an Application for Final Decree to have the Court enter the Final Decree and close the case. See Application for Final Decree/Final Report

 

 

 

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